October 2009

GROCERY SHOPPING & THE DISCOUNTERS

BAROMETER TRACKING SURVEY – STAGE 8

PREPARED BY; Behaviour & Attitudes Milltown House, Mount St Annes, Milltown, 6.

MAIN CONTACTS: Graham Wilkinson, Director T: 01 205 7500 E: [email protected]

Martha Fanning, Director T: 01 205 7500 E: [email protected]

J.1460

Table of Contents

INTRODUCTION 3 SUMMARY & CONCLUSIONS

1. GROCERY SHOPPING 8-9 6 in 10 still rely on a main weekly trip

2. STORE USAGE 10-11 and the Discounters have widest reach

3. STORE SHARE ESTIMATES 12-13 Tesco reaffirmed & / steady

4. WEEKLY GROCERY SPEND 14-16 Lower than last year at €133

5. GROCERY SPEND x MAIN STORE 17-18 Dunnes & Tesco shoppers – highest spenders

6. SPENDING INCREASES 19-22 Assumptions vs reality – less of a gap

7. THE DISCOUNTERS 23-29 Wider availability & higher usage

8. ALDI & LIDL PURCHASES 30-32 Broadly similar purchase profiles

9. ALDI & LIDL – PERFORMANCE 33-36 Strong ratings, but progress checked

10. ALDI & LIDL – FUTURE USE 37 On balance – continued growth

APPENDICES Sampling Points Social Grade Classification Questionnaire

2 INTRODUCTION

This research on grocery shopping has been conducted by Behaviour & Attitudes Limited on an annual basis since 2002, in order to track awareness, usage and perceived performance of the two German discounters, Aldi & Lidl.

This latest stage was conducted during October 2009 and covered the following information:-

. Normal approach to grocery shopping . Main store used for grocery shopping . Other stores used for grocery shopping . Estimated weekly spend on groceries nowadays . Estimated weekly spend on groceries a year ago . Reported trends in grocery spending versus last year . Share of grocery spend across main stores . Awareness of Aldi or Lidl . Local availability of Aldi or Lidl . Incidence of visiting Aldi or Lidl . Incidence of shopping in Aldi or Lidl . Frequency of shopping in Aldi or Lidl . Aldi/Lidl ratings on range of choice . Aldi/Lidl ratings on general product quality . Aldi/Lidl ratings on value for money . Aldi/Lidl ratings on prices vs the main . Expectations for future Aldi/Lidl usage

3 All stages of this research have been based on participation in B&A’s bi-monthly syndicated Barometer survey. Each Barometer survey is based on a nationally representative quota sample of 1,000 adults (aged 16 years and over).

All interviewing is conducted face-to-face in-home, using a structured questionnaire. Interviewing is carried out across 60 separate sampling points to ensure comprehensive geographical spread, and a fresh sample is used for each survey.

Selection of respondents is determined by quota controls relating to gender, age and social class within region, to ensure a microcosm of the national adult population.

All interviewing is carried out by fully trained and experienced members of B&A’s interviewer panel, working under direct supervision throughout the survey. All aspects of this research are conducted in accordance with guidelines from the Market Research Society and ESOMAR (the International representative body for Marketing Research organisations).

Fieldwork for this latest stage was completed between the 13th – 23rd October 2009.

Technical appendices comprise a list of sampling points, social class definitions and a copy of the survey questionnaire.

4 SUMMARY & CONCLUSIONS

. A majority of grocery shoppers continue to rely on one main trip weekly (60%). We had seen a gradual increase in spreading this over 2 or more days, but this has seen a reversal this year, in favour of a more varied shopping approach.

. Tesco and Dunnes remain by far the two most popular choices for main shopping – but any usage of the discounters has increased further: now ahead of Dunnes and on a par with Tesco. (Indeed usage of Lidl now exceeds that of Dunnes).

. Shopper estimates of where they spend an average of €100 places Tesco with a considerable lead at 27%, Dunnes 21% and the discounters at 25% combined, (Lidl at 15%/Aldi 10%).

. As in the past, Tesco and Dunnes have a stronger shopper presence in urban areas and SuperValu in rural areas.

. Weekly grocery spend estimates are marginally below 2008 level; an average of €133 compared to €136 last year (-2%).

. Dunnes and Tesco main shoppers show the highest grocery spending per household – but per capita expenditure is highest for and SuperValu customers.

. In previous waves of this tracking research we saw a consistent tendency for shoppers to exaggerate increases in their grocery spend, compared with their reported spend ‘year on year’. Previously shoppers had been assuming double digit increases, but are more measured now in gauging this gap versus last year ( expressed as a decrease).

5 . When current expenditure is compared with estimates and actual reports a year ago – a more modest gap emerges for 2009 vs 2008:

o Reported spending showed a 2% decrease o Yet shoppers assumed a 9% decrease

. In line with this, just under half of all shoppers now feel they are spending less than last year (38% a little lower and 10% a lot lower) – whereas in all previous measures, a solid majority had claimed to be spending more.

. Aldi and Lidl are now well established ‘household names’ and both have made further progress on key indices of:

o Local availability o Incidence of visiting stores o Incidence of purchasing in stores

. Currently, 8% say they do their main grocery shopping in Lidl, and 7% in Aldi.

. Amongst existing shoppers, frequency of using of either Aldi or Lidl has plateaued after significant gains in 2008.

. Shopper playback on the ‘top ten’ most popular purchases was similar for both chains; fresh fruit & veg the most widely purchased category – ahead of household cleaners, biscuits, cheese, toilet rolls and toiletries.

. However, typical purchases in these discounters embrace a very much broader spectrum of product categories.

. While still very favourably regarded, ratings on range and quality are down slightly for both discounter chains.

6 . While both rate highly on value for money, Aldi is down slightly versus previous years, and Lidl is holding steady.

. Similarly in relation to prices versus other stores, both groups still make a very strong showing - but Lidl’s ‘lower prices’ rating is down versus 2008, whereas Aldi’s is steady.

. In 2008 we saw roughly a quarter of shoppers in Aldi and Lidl claiming they would use these stores more often over the coming year – whereas this has dropped to just under 1 in 5 now (a majority in each case anticipating no change).

. Thus, despite the continuing recession, fewer existing shoppers than last year feel that doing more shopping in Aldi or Lidl is the solution – perhaps a reflection of the competitive response from more established retailers.

7

1. GROCERY SHOPPING 6 in 10 still rely on a main weekly trip

Reliance on one main weekly shopping trip for groceries remains the norm: 6 in 10 shoppers currently adopting this approach (with some topping up).

Normal Approach to Grocery Shopping (1) All Shoppers: 694

It varies

Daily 9%

6%

Spread over 2+ 25% One main trip days a week 60% weekly (+ top ups)

A further quarter (25%) spread their grocery shopping over two or more days in the week, with just 6% shopping daily and the balance of almost 1 in 10 varying their approach.

8 As these historic trend data indicate, majority reliance on one main weekly trip has been very consistent over time.

Normal Approach to Grocery Shopping (2) All Shoppers: 694

2002 2003 2004 2005 2006 2007 2008 2009

59% One main trip 62% 60% 60% 60% 64% 65% 67% weekly (+ top ups)

27% Spread 2+ days 25% 20% 31% week 24% 21% 27% 32%

9% 6% Daily 7% 8% 6% 5% 5% 6% 7% 7% 9% It varies 5% 5% 5% 3% 4%

The main difference in these latest results is an increase among those who now vary their approach (up from 4% to 9%): almost certainly a function of the more pressured economic climate.

9 2. STORE USAGE Tesco & The Discounters have widest reach

The chart below summarises main shop choices and any usage levels for the main groups.

Overall usage shows Tesco and the Aldi/Lidl combination with jointly highest reach at around 6 in 10 shoppers each: Dunnes and SuperValu are next in line, with Lidl usage (at all) now higher than Dunnes (51% vs 44%).

Shop Usage (1) All Shoppers: 694

Main Shop Use at all

Tesco 34% 59%

Dunnes 26% 44%

SuperValu 12% 31%

Any Aldi/Lidl 15% 60%

Any 5% 26%

Superquinn 4% 12%

Other 5% 14%

Lidl 8% 51%

Aldi 7% 33%

Main store choices show Tesco enjoying a very decisive lead with an estimated share of 34%34% overall, ahead of Dunnes at 26%, Aldi/Lidl 15% and SuperValu 12% (the two German discounter groups are at a similar level now).

10 This chart compares main shop choices and usage levels for the main supermarket groups, based on a comparison of the two most recent measures and an average for 2002 – 2007.

Shop Usage (2) All Shoppers: 694

Main Shop Use at all

Tesco Average* 30% 51% 2008 29% 56% 2009 34% 59%

Dunnes Average* 25% 46% 2008 27% 50% 2009 26% 44%

SuperValu Average* 19% 37% 2008 16% 35% 2009 12% 31%

Any Symbol group Average* 9% 31% 2008 5% 24% 2009 5% 26%

Any Aldi/Lidl Average* 6% 39% 2008 16% 55% 2009 15% 60%

Superquinn Average* 6% 14% 2008 5% 10% 4% 12% * Average for period 2002 - 2007 2009 * Average for period 2002 - 2007

In broad terms, Tesco has consolidated its position: Dunnes has held fairly steady and SuperValu appears to have lost some ground.

The main dynamic has been progress by Aldi/Lidl, where there has been significant progress over the past two years.

11 3. STORE SHARE ESTIMATES Tesco reaffirmeded & Aldi/Lidl steady

These broadlybroadly based market ‘share’ estimates were based on asking shoppers to describe how they distribute an average €100 expenditure on groceries, across the main retailer brands.

Market Share Estimates (1) Based on average €100 spend All Shoppers: 694 All shoppers Weekly grocery spend ‘09

Average 2007 2008 2009 Heavy Med Low 2002-2006

18% Dunnes 20% 21% 22% 21% 23% 20%

Tesco 24% 25% 23% 27% 28% 29% 28%

10% 17% SuperValu 15% 11% 10% 2% 16% 13% 4% 4% Superquinn 6% 4% 10% 5% Aldi 4% 4% 8% 10% 11% 7% 9% 18% Lidl 10% 16% 15% 15% 11% 13% Other 19% 12% 12% 12% 9% 12% 17%

Any Aldi/Lidl 14% 18% 24% 25% 22% 26% 28%

Compared with last year,year, Tesco has reaffirmed its leadership position: Dunnes and Aldi/Lidl have held fairly steady and SuperValu appears to have lost ground. An analysis of the current results on the basis of grocery expenditure, suggests that Aldil/Lidl fare somewhat better among medium and lower spending shoppers.

12 Tesco seems to enjoy more of an edge over Dunnes among young and middle aged range shoppers, and those at middle class level.

Market Share Estimates (2) Based on average €100 spend All Shoppers: 694 AGE CLASS AREA

-35 35-49 50+ ABC1 C2DE F Urban Rural

11% 14% 20% 18% Dunnes 24% 22% 22% 25% 14% 21%

28% 30% Tesco 24% 30% 26% 21% 31% 16% 2% SuperValu 9% 11% 11% 11% 1% 16% Superquinn 12% 3% 2% 3% 6% 8% 16% 14% 5% 17% 5% Lidl 18% 12% 9% 13% 14% 12% 12% 6% Aldi 12% 12% 8% 8% 27% 20% Other 13% 17% 11% 8% 10% 9%

Any Aldi/Lidl 26% 30% 18% 21% 29% 25% 22% 28%

The Aldi/Lidl combination also has a comparatively higher share among young and middle age range shoppers, and is above average at working class level and in rural areas.

13 4. WEEKLY GROCERY SPEND Lower than last year at €133

Just over 4 in 10 of these shoppers estimated their weekly grocery expenditure at over €130: around a third put this figure between €90 - €130 and the balance of a quarter claim to be spending less than €90 per week.

Amount Spent on Groceries per Week – (1) All Shoppers: 694

Low (-€90)

26%

43% High (€131+)

31%

Medium (€90-130)

AverageAverage estimate estimate : : €133 €133

In overall terms, this produced an average estimate of €133 for weekly grocery expenditureexpenditure (with a greater concentration among Medium spenders compared with last years results).

14 Variations in these averages for weekly grocery expenditure are summarised below for the main demographic sub groups.

Amount Spent on Groceries per Week (2) All Shoppers: 694

Average estimate (€)

Total €133

Men €118 Women €142

-34 €127 35-49 €149 50+ €126

ABC1 €141 C2DE €125 F €136

Children €158 No Children €116

Urban €132 Rural €135

These averages for reported expenditure were somewhat higher for women, those in the mainstream family age range and particularly in households with children (over a third higher among those with kids at home).

15 This retrospective summary of average weekly grocery expenditure over the past eight years, provides a very clear picture.

Amount Spent on Groceries Per Week – (3) All Shoppers: 694

All Shoppers Growth (YonY)

2002 €119 -

2003 €123 +3%

2004 €127 +3%

2005 €132 +4%

2006 €133 +1%

2007 €136 +2%

2008 €136 =

2009 €133 -2%

Estimates of grocery spending had been on a constant upward curve between 2002 – 2007, but this plateaued last year, and has fallen back by 2% in this current update.

16 5. GROCERY SPEND X MAIN STORE Dunnes & Tesco shoppers – highest spenders

This summary compares estimates of average weekly expenditure on groceries for each of the last three years, alongside equivalent consolidated data for 2002 – 2006.

Average Spend Per Household x Main Store All Shoppers: 694

Var 2007 2008 2009 2002-2006 ‘08 – ‘09 Superquinn €149 €152 €155 €130 -16%

Dunnes €134 €141 €153 €143 -6%

SuperValu €127 €138 €144 €134 -7%

Tesco €126 €134 €127 €138 +8%

Symbol Groups €120 €127 €111 €126 +14%

€118 Aldi/Lidl €109 €125 €115 -2%

€127 Overall €136 €136 €133 -2%

The latest results show that Dunnes and Tesco shoppers are the highest spenders, while those using Aldi/Lidl are lowest.

Compared with last year, spending in Superquinn appears to have dropped sharply, with reductions also evident for Dunnes and SuperValu.

In contrast, both the Symbol groups (consolidated) and Tesco shoppers appear to have upped their spending.

17 It may also be helpful to look at these latest estimates of grocery spending across the main retail brands by taking account of household size to identify per capita expenditure.

Average Spend Per Head X Main Store All Shoppers: 694

Spend per household Household Size Spend per head

Superquinn €130 2.52 €51.59

Dunnes €143 3.07 €46.58

SuperValu €134 2.76 €48.55

Tesco €138 3.11 €44.37

Symbol Groups €126 2.67 €47.19

Aldi/Lidl €115 3.35 €34.33

As there is some variation in the average household size for customers of these groups, this produces a rather different rank order in which spend per head is highest overall for Superquinn, just ahead of a secondary grouping which comprises SuperValu, the Symbol groups and Dunnes (Tesco registering slightly lower and Aldi/Lidl representing the baseline).

18 6. SPENDING INCREASES Assumptions vs Reality – Less of a Gap

As previous stages of this tracking survey have illustrated, grocery shoppers invariably exaggerate the extent to which they feel their grocery spending has increased from one year to the next.

This chart summarises three key measures for 2008 and 2009: . Current estimates of weekly spending . Estimated weekly spending a year ago . Reported weekly spending a year ago

By drawing on these three measures, we can identify the gap between assumptions and actual (reported) spending.

Price Increases: Assumptions vs Reality Base: 2009 Vs. 2008

2008 2009

Average reported Average reported spend per €136 spend per €133 household 2008 household 2009

Amount shoppers €166 Amount shoppers €146 think they were think they were spending in 2007 spending in 2008

Average reported €136 Average reported €136 spend per spend per household in 2007 household in 2008

% increase year on year % increase year on year %% increase increase year year on on year year Actual = Actual = ActualActual -2%-2% Assumed +17% Assumed +17% AssumedAssumed -9%-9% Difference +17% Difference +17% DifferenceDifference -7%-7%

19 In 2008, ‘year on year’ increases in grocery expenditure showed no change, although shoppers assumed that on average they were spending 17% more on groceries.

In the latest results, this gap has closed considerably: the actual change recorded ‘year on year’ was a decline of 2% but the assumed decrease was 9% (i.e. a net difference of 7 percentage points between reported and assumed reductions in grocery expenditure).

Looking back at the historic pattern of these differences between actual (reported) and assumed changes in grocery spending levels serves to emphasise the very dramatic turnaround in these latest figures.

Actual vs Assumed Grocery Price Increases 2003 - 2009 % increase on previous year GAP %

2003 3% Actual 15% +12 Assumed

3% 2004 Actual 17% +14 Assumed

4% 2005 Actual 18% +14 Assumed

1% 2006 Actual +13 Assumed 14%

2007 Actual 2% Assumed 11% +9

2008 Actual 0% Assumed 17% +17

2009 Actual -2% Assumed -9% -7

Following a six year sequence in which assumed increases in spending ran well ahead of actual reported figures, we have seen a total reversal now (i.e. a ‘reverse swing’ of 24 percentage points between assumptions last year and this year). 20 A related question asked shoppers to compare their grocery spending this year compared with last year, and the latest results showed a remarkable contrast with the preceding pattern.

Weekly Grocery Spend This year vs. last year All Shoppers: 694 Any shopping

2002 2003 2004 2005 2006 2007 2008 2009 3% 10% 28% 33% 32% 39% 40% 47% 60% Much higher 37%

43% 34% 41% 34% 40% 37% A little higher 21% 38%

21% 20% 27% About the same 22% 12% 5% A little lower 17% 17% 5% Much lower 2% 2% 1% 1% 10% 8% 5% Don’t know 1%0%1% 0%2% 0%1% 0%1% 0% 3%0% 2% 1%

In the two previous years, between two thirds and three quarters of all shoppers estimated that their current spending was higher than the previous year.

In a complete turnaround, the latest results show just 13% of shoppers claiming higher expenditure now, whereas 37% felt there was no change and almost half (48%) now say they are spending less than in 2008.

21 It is also useful to look at these latest results on the basis of weight of grocery spending, and for those using Aldi or Lidl (LRDs).

Weekly Grocery Spend This year vs. last year All Shoppers: 694 Total Spend € Aldi/Lidl Users High Med Low (131+) (90-130) (-90) Main Ever 3% * 3% 3% Much higher 4% 6% 10% A little higher 10% 13% 11%

43% 31% 37% About the same 34% 38%

36% 39% 42% 38% A little lower 34%

18% Much lower 12% 10% 7% 12% Don’t know 1% 2% 2% 1% 1%

In short, those at the lower end of the spending scale are even more convinced that they are spending less on groceries nowadays, and this pattern was similar for those using Aldi/Lidl (either as their main store or part of their repertoire).

22 7. THE DISCOUNTERS Aldi & Lidl – Wider Availability & Higher Usage

As far back as 2005, both of the German discounter brands already enjoyed universal recognition.

Discounters – Awareness of Aldi + Lidl All Shoppers: 694

100% 99% 100% 99% 100% 99% 99% 96% 97% 98% 98%

90%

80%

70%

60%

50% 2005 2006 2007 2008 2009

Not surprisingly in view of their stronger presence and more ‘mainstream’ role, this still applies to both brands.

23 Back in 2005, three quarters of all grocery shoppers had claimed to have a Lidl within shopping distance of their home and, the equivalent figure for Aldi was just over half.

Discounters – Local Availability All Shoppers: 694

100%

90% 89%

83% 82% 80% 76% 75% 75% 70% 71%

60% 58% 53% 50% 53% 2005 2006 2007 2008 2009

Within the intervening four years, perceptions of local availability for both German discounters has increased very significantly: Lidl to a level of 9 in 10 and Aldi to 3 in 4 shoppers.

24 Steady and sustained progress is also evident in relation to reported experience of visiting outlets within the two German discounter networks.

Discounters – Incidence of Visiting All Shoppers: 694

100%

90% 89% 82%

80% 77% 73%

70% 67% 69%

64% 60%

55% 50% 47% 50%

40% 2005 2006 2007 2008 2009

Between 2005 and 2009, the claimed incidence of visiting Lidl rose from 67% to 89%, and in the case of Aldi from 47% to 69%.

25 A similar measure on the reported incidence of shopping in either Lidl or Aldi outlets is summarised here.

Discounters – Incidence of Shopping All Shoppers: 694

100%

90%

80% 77% 72% 70% 68% 64%

60% 59% 58% 50% 50% 44%

40% 37% 37%

30% 2005 2006 2007 2008 2009

Between 2005 and 2009, direct experience of shopping in Lidl rose from 59% to 77%, and in the case of Aldi from 37% to 58% (i.e. solid and consistent expansion of the franchise for both brands).

26 The current brand status for Aldi on these key measures is summarised below.

Aldi Brand Status Check - Summary All Shoppers: 694

Main Grocery Shop 7% (5)

Use monthly+ 33% (27)

Ever shopped at 58% (50)

Ever visited 69% (64)

Available locally 75% (71)

Aware of 99% (98)

FiguresFigures in in brackets brackets are are for for 2008 2008

This confirms universal awareness, local availability for three quarters of all shoppers, visits by 7 in 10 and shopping by almost 6 in 10.

A third claimed to use Aldi outlets at least monthly or more often, with a core of 7% who regard it as their main grocery store.

27 The equivalent brand status summary for Lidl shows an even stronger set of metrics.

Lidl Brand Status Check - Summary All Shoppers: 694

Main Grocery Shop 8% (11)

Use monthly+ 51% (45)

Ever shopped at 77% (72)

Ever visited 89% (82)

Available locally 89% (93)

Aware of 100% (99)

FiguresFigures in in brackets brackets are are for for 2008 2008

This demonstrates universal awareness for Lidl; local availability and direct experience of visiting at a level of 9 in 10, and shopping there by three quarters.

Half of all grocery shoppers now claim to use Lidl monthly or more often, with 8% regarding it as their main grocery store.

28 Reported frequency of shopping in either Aldi or Lidl highlights an interesting pattern for both discounter chains.

FREQUENCY OF SHOPPING IN ALDI/LIDL (Base: All shoppers at each store)

2005 2006 2007 2008 2009 2005 2006 2007 2008 2009

Weekly+ 17% 21% 23% 23% 25% 25% 30% 33% 35% 33% Fortnightly 16% 12% 15% 21% 14% 14% 15% Monthly 11% 13% 18% 17% 16% 16% 11% 20% 20% 14% 21% 12% 17%

49% 51% 56% Less often 40% 44% 41% 42% 39% 35% 32%

Base: Unweighted(238) (248) (252) (272) (389) (392) (428) (408) (415) (532)

In both cases, there was a marked step up in the proportion of those claiming to use these outlets at least weekly or more often, between 2007 and 2008.

However in both cases, there has been little change in the latest update for 2009, which suggests that some degree of plateauing has occurred.

29 8. ALDI & LIDL PURCHASES Broadly Similar Purchase Profiles

The ‘top ten’ most popular product categories for purchases in Aldi and Lidl are summarised below.

While the mix was broadly similar for both discounter chains, it would appear that toilet tissues feature somewhat more prominently for Lidl, and household cleaners for Aldi.

Top 10 Items Bought on Last Visit

Base (347) Base (493)

Fresh Fruit & Veg 52% Fresh Fruit & Veg 49%

H/H Cleaners 35% Toilet Tissues 36%

Biscuits 35% Biscuits 35%

Toiletries 31% H/H Cleaners 34%

Cheese 31% Toiletries 32%

Toilet Tissues 30% Cheese 30%

H/H Products 27% H/H Products 28%

Detergents 24% Fruit Juices 25%

Frozen Food 23% Detergents 23%

Fruit Juices 22% Soft Drinks 21%

30 A more detailed breakdown of the items bought on most recent visits to Aldi or Lidl is summarised in the table below and its continuation over the page.

Aldi/Lidl - Items Bought on Last Visit (1) All shoppers: 694

Base: 347 493 % % Fresh fruit & veg 52 49 Toilet tissues/rolls 30 36 Household cleaners 35 34 Toiletries 31 32 Biscuits 35 35 Cheese 31 30 Household products 27 28 Detergents/washing powder 24 23 Juices/fruit juices 22 25 Fresh meat 18 17 Frozen food 23 23 Soft drinks 18 21 Cereals 19 19 Confectionery 14 16 Butter/spreads 13 16 Pasta/noodles 20 18 Pre-packed bread 17 15 Bacon/rashers 15 15 DIY items 18 16 Ice cream 18 15 Cakes 12 9 Hardware 10 10 Electrical appliances 11 11 Chips 9 11

Perhaps the most striking aspect of this first half table is the broad range and variety of lines which are now purchased from these two store networks.

31 Although there are some differences in product emphasis for the two German brands (e.g. pizza somewhat more popular in Aldi), the overall pattern is quite similar.

Aldi/Lidl - Items Bought on Last Visit (2) All shoppers: 694

Base: 347 493 % % Wine 16 16 Desserts 9 8 Sauces/ketchup 11 15 Tinned food 10 14 Frozen chicken 12 12 Beer 11 11 Pet food 10 9 Pizza 17 12 Squash/fruit squash/cordials 10 11 Tools 7 9 Flour 6 6 Nappies 5 5 Ethnic dry meats 5 5 Tinned fruit 13 15 Nuts 9 8 Rice/couscous 10 12 Spirits 9 9 Pickles/chutney/relish 8 8 Footwear 1 3 Bake at home bread 5 5 Christmas cakes 2 3 Furniture 1 3 Baby formula * 2 Baby food 2 3 Other 9 10

Indeed, it is worth noting how close a match there is in these purchasing profiles for the two German retailers, across such a varied spectrum of product categories.

32

9. ALDI & LIDL - PERFORMANCE Strong ratings, but progress checked

The Aldi and Lidl chains were each rated by their respective shoppers on four key performance criteria – range of choice, general product quality, value for money and prices versus the main supermarkets.

Both brands had enjoyed a strong and improving position on range of choice between 2006 and 2008.

Range of Choice – Aldi + Lidl All current users of each

2002 2003 2004 2005 2006 2007 2008 2009 2002 2003 2004 2005 2006 2007 2008 2009

6% 6% 6% 6% 8% 7% 6% 6% 5% 6% 8% Excellent 12% 9% 10% 10% 9%

Very good 30% 30% 30% 30% 31% 32% 37% 30% 27% 35% 29% 36% 37% 36% 37% 39%

Fairly good 43% 44% 45% 47% 43% 46% 47% 45% 42% 44% 49% 42% 46% 44% 36% 42%

6% 9% 9% Fairly poor 15% 7% 1% 9% 8% 2% 1% 10% 14% 10% 13% 9% 6% 9% 4% 2% 3% 2% 10% 9% 1% Very poor 10% 1% 2% 1% 10% 5% 10% 2% 1% 7% Don’t know 2% 2% 2% - 4% 1% 1% 5% 3% 5% 1% 2%1% 2% Excellent/very good 36 51 36 43 36 45 47 38 37 44 36 41 36 38 44 38

However in both cases, these latest results have fallen back somewhat (to levels closer to those recorded in 2006/2007).

33 A similar pattern was evident in these latest measures on perceptions of general product quality from the two German chains.

Quality of Products – Aldi + Lidl All current users of each

2002 2003 2004 2005 2006 2007 2008 2009 2002 2003 2004 2005 2006 2007 2008 2009

Very high 9% 13% 11% 11% 14% 13% 12% 11% 11% 18% 16% 18% 18% 17% 16% 18%

Fairly high 32% 26% 39% 35% 36% 39% 34% 40% 32% 41% 43% 39% 32% 39% 44% 41%

About average 39% 46% 33% 39% 36% 38% 38% 33% 36% 38% 41% 36% 34% 31% 37% 30% 5% Fairly poor 4% 3% 17% 6% 7% 7% 8% 5% 5% 14% 7% 5% 0% 5% - 5% 5% Very poor 1% 2% 2% 1% 7% 2% 11% 10% 1% 1% * 9% 5% * 1% 1% 5% 6% Don’t know 2% 2% 2% 4% 1% 1% 5% 3% 1% 2%1%1% Very/fairly high 41 62 50 53 51 57 59 51 37 57 49 53 46 50 55 50

Although the ratings for both brands remain strong, consistent progress between 2006-2008 has been reversed in both cases (more marked for Aldi).

34 Aldi and Lidl have enjoyed very positive ratings on value for money over recent years and their respective ratings in 2008 were closely aligned.

Value for Money – Aldi + Lidl All current users of each

2002 2003 2004 2005 2006 2007 2008 2009 2002 2003 2004 2005 2006 2007 2008 2009

34% 33% Very good value 39% 35% 37% 36% 38% 37% 42% 42% 42% 40% 39% 40% 51% 48%

45% 35% 41% 41% 41% 48% 47% 40% 38% 38% Fairly good value 38% 38% 44% 42% 39% 40% 17% 9% 12% 15% 14% 14% About average 13% 11% 17% 13% 9% 13% 18% 18% 5% 10% 1% * 1% Fairly/very poor 2% 1% 1% 1% 6% 9% 11% 3% 5% 1% 2% 2% 2% 2% 5% 10% 2% 6% Don’t know 2% 2% 3% 4% 1% 1% 5% 3% 6% 2% 2% Very/fairly good 80 91 80 82 76 80 78 72 83 87 84 82 80 77 78 78

These latest ratings on value are unchanged for Lidl but, show slight slippage for Aldi over the past year.

35 Back in 2002-2003, almost all shoppers rated Aldi and Lidl prices as lower than the main supermarket groups, but this very decisive advantage on prices had ‘softened’ somewhat in the intervening period.

Aldi + Lidl - Prices vs Main Supermarkets All current users of each

2002 2003 2004 2005 2006 2007 2008 2009 2002 2003 2004 2005 2006 2007 2008 2009 Much/a little higher 1% 3% 1% 1% 3% 5% 4% 2% 2% 1% 1% 2% 3% 4% 4% 2% 6% 9% 8% 5% 8% About the same 1% 13% 12% 11% 14% 16% 14% 17% 17% 18% 18% 38% 43% 42% 48% 48% A little lower 48% 49% 50% 45% 46% 52% 42% 48% 48% 55% 53%

56% 40% 50% Much lower 46% 27% 36% 26% 42% 30% 34% 33% 28% 26% 21% 27% 26%

9% 11% 9% 6% 6% Don’t know 2% 2% 5% 2% 4% 1% 1% 2% 6% 2% 1% Much/a little lower9494828072767472 9093848280758174

The latest figures confirm this pattern, but the balance is still very strongly in favour of the discounters: 72% rating Aldi, and 74% Lidl as offering lower prices than other main grocery retailers.

36 10. ALDI & LIDL – FUTURE USAGE On balance – continued growth

When shoppers in the two German discounters were asked what changes in their usage of these stores (if any) they anticipated over the coming year, a majority in each case expected to maintain their current approach.

Among the balance, there was a tendency to predict they would do more of their shopping there (Aldi +14 and Lidl +12).

Aldi/Lidl - Future Usage Plans All current users of each

Will buy… 20032004 2005 2006 2007 2008 2009 2003 2004 2005 2006 2007 2008 2009 3% 3% 3% 4% 4% 3% A lot more there 7% 5% 6% 6% 5% 7% 8% 11% 14% 10% 14% 18% 14% 13% 19% 18% 14% 19% 19% A little more there 18% 23% 18%

59% 46% 59% 66% 65% 46% 59% 59% 52% The same 57% 62% 55% 58% 49%

4% 4% 5% 5% 7% 6% 9% 5% 8% 4% 6% 5% A lot/little less 4% 5% 2% 9% 7% 6% 3% 2% 2% 1% Will not use 9% 18% 3% 7% 2% 18% 15% 2% 11% 13% 12% 4% 12% Don’t know 9% 11% 7% 5% 5% 2% 7% Difference (more) +16 +16 +14 +13 +7 +20 +14 +22 +19 +23 +17 +8 +21 +10

This latest picture is broadly similar to the pattern back over time (with some variations), although it is worth noting an increase in a minority of shoppers who claim they would not use these outlets in future (8% for Aldi and 7% for Lidl); almost certainly a function of the competitive response by other major supermarkets during the past year. 37